3 ms·
Greeks are a family of derivatives that apply to options, not just one. Delta is the amount an option goes up or down in price for every $ the underlying moves
by arcticbull 5y ago
Greeks are a family of derivatives that apply to options, not just one.
Delta is the amount an option goes up or down in price for every $ the underlying moves.
Gamma is the second derivative. The change in delta as a function of change in price of the underlying.
Theta is the amount an option goes down in price for each day you hold it (“time decay”)
- alex_smart 5y agoYou know you're in a forum of programmers when you implicitly switch a noun from plural to singular in a parenthetical remark and instead of inferring the meaning based on context, someone feels the need to correct you.
- gumby 5y agoI didn’t read it as a correction to number but rather as a response to your “I don’t know why”
- arcticbull 5y agoIndeed I wasn't trying to correct the parent - I actually found the explanation pretty cool. Rather to provide some color to the folks here without financial background. I figured an explanation of what the common greeks were would help folks without a financial background understand how it's possible to work backwards from them to an updated price. Sorry if it didn't come across that way @alex_smart!
- azalemeth 5y agoIt definitely educated me!